11 Reasons Not To Enforce Your Trade Secret

Colonel_Sanders_Rapstar-1I’m strangely fascinated by the recent “revelation” about Colonel Sanders’ secret recipe for Kentucky Fried Chicken. His nephew showed a journalist a handwritten list that was left behind by Sanders’ second wife that listed 11 herbs and spices in specific proportions.  Yum Brands, which owns KFC, denies that this is the secret recipe.

This situation exposes a basic problem in trade secret law, which is that the available remedies are often pretty inadequate. Suppose this is the secret recipe.  Suing Sanders’ nephew will not get you much in damages–he’s not wealthy.  You can’t get an injunction–the information is out.  Maybe the only thing you can do is pretend that this is not the real recipe and not bring an enforcement action at all. (Granted, you can say that the real value of KFC is in its brand rather than its secret recipe, so a revelation like this actually causes little or no harm, but I’m not sure Yum thinks so.)

More broadly, trade secret law suffers from the problem that the owner of the information really needs an ex ante remedy akin to a prior restraint.  Once the secret information is out, there’s not much that can be done. Acting before that happens, though, is often impossible or requires keen anticipation skills. Perhaps this is why, as a practical matter, confidential information is protected more effectively through physical security measures, extra compensation, etc.

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2 Responses

  1. Brett Bellmore says:

    Essentially, the decision to go the trade secret route, is a decision to not have any legal protection against anybody who hasn’t contracted with you. It’s often a good decision where the secret really can be kept secret, as patent protection legally requires you to tell your competitors how you do it. Specifically so that they can improve on what you’re doing. But the down side is, once the cat is out of the bag, you’re out of luck.

    I’ll be trying out that recipe some time this week… With an eye to tuning it more to my family’s taste.

  2. Orin Kerr says:

    Criminal liability for disclosing trade secrets under the Economic Espionage Act was designed to address this problem, although it wouldn’t apply to a disclosure like the KFC case.